Sureshbhai Makanshi Gadesha, V. The Income Tax Officer, Ward-5(2), RAJKOT-GUJARAT

ITA 72/RJT/2013

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8775 (ITAT-RAJKOT)
• Duration Of Justice: 6 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 01-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 250; 201; 64; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE: SHRI RAJPAL YADAV, JUDICIAL MEMBER AND S H RI AMARJIT SINGH , ACCOUNTANT MEMBER [CONDUCTED THROUGH E - COURT AT AHMEDABAD] SURESHBHAI MAKANSHI GADESHA, PROP. GANESH SOAP AND CHEMICAL INDUSTRY, VERAVAL (SHAPAR) PAN: AGHPG5642F (APPELLANT) VS THE ITO , WARD - 5(2), RAJKOT (RESPONDENT) REVENUE BY : S H RI PRAVEEN VERMA , SR. D . R. ASSESSEE BY: NONE DATE OF HEARING : 2 6 - 08 - 2 019 DATE OF PRONOUNCEMENT : 13 - 09 - 2 019 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THE INSTANT APPEALS FOR ASSESSMENT YEAR 2004 - 05 AND 2005 - 06 VIDE ITA NOS. 72 &73/RJT /2013 HAVE BEEN FILED AGAINST THE DECISION OF CIT - IV, RAJKOT ON THE IDENTICAL ISSUE IN SUSTAINING THE ADDITION OF R S. 2,50,000/ - AND RS. 10 LACS RESPECTIVELY ON EARING COMM ISSION IMPORTING QUANTITY OF CPO FOR LENDING HIS LICENSE. THE ASSESSMENT FOR BOTH THE YEARS I.E. 2004 - 05 AND 200 5 - 06 WAS I T A NO S . 72 & 73 / RJT /20 13 A SSESSMENT YEAR 200 4 - 05 & 2005 - 06 I.T.A NO S . 7 2 & 73 /RJT /20 13 A.Y. 2004 - 05 & 2005 - 06 PAGE NO SURESHBHAI MAKANSHI GADESHA VS. ITO 2 COMPLETED U/S. 144 OF THE ACT. IN SPITE OF GIVING NUMBER OF OPPORTUNITIES , T HE ASSESSEE NOT MADE ANY COMPLIANCE TO THE LETTERS AND NOTICE S ISSUED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. SINCE THE ISSUE IN APPEAL IN BOTH THE ASSESSMENT YEARS IS ON IDENTICAL FACTS, THEREFORE, FOR THE SAKE OF CONVENIENCE , WE ARE TAKING ASSESSME NT YEAR 2044 - 05 CONTESTED VIDE ITA NO. 72/RJT/2013 AS LEAD CASE AND ITS FINDING WILL ALSO BE APPLICABLE TO ITA NO. 73/RJT/2013. 2. THE FACT IN BRIEF IS THAT THE ASSE SSEE RECEIVED INFORMATION FROM DRI, GANDHIDHAM THAT ASSESSEE H AD MADE AN APPLICATION BEFOR E CENTRAL EXCISE DIVISON - 2 RAJKO T INTENDING TO IMPORT 1250.000 MT OF CP O (IG) ON THE BASIS OF THEIR CENTRAL EXCISE REGISTRATION OBTAINED BY THE ASSESSEEE. ACCORDINGLY , THE ASSESS EE HAD IMPORTED TOTAL 1245.64 MT OF CPO (IG) DURING THE PERIOD FROM MARCH, 20 04 TO AUGUST, 2004 WHICH IS REPRODUCED AS UNDER: - VESSEL'S NAME BILL OF ENTRY NO. & DT QUANTITY MT NOVENA 3357/05/03/04 250 NOVENA 5978/29/04/04 250 SHAMROCK MOON 9078/24/06/04 245.46 SHAMROCK MOON 10599/15/07/04 250 PACIFIC SOUND 122 39/09/08/04 250 TOTAL 1245.64 THE ASSESSEE HAD ADMITTED IN HIS STATEMENT RECORDED BEFORE THE DRI THAT ASSESSEE UNDER HIS PRO PRIETARY CONCERN SRI GANESH SOAP AND CHEMICAL INDUSTRIES HAS GIVEN HIS LICENSE FOR IMPORTING THE AFORESAID CONSIGNMENT THROUG H MR. DINESH PAV ARI TO OTHER PARTIES AND HE HAS RECEIVED AN AMOUNT OF R S. 2.5 LACS PER IMPORT. I.T.A NO S . 7 2 & 73 /RJT /20 13 A.Y. 2004 - 05 & 2005 - 06 PAGE NO SURESHBHAI MAKANSHI GADESHA VS. ITO 3 CONSEQUENTLY, THE ASSESSING OFFICER HAS ADDED AN AMOUNT OF R S. 2.5 LACS TO THE TOTAL INCOME OF THE ASSESSEE. 3. THE ASSESSEE HAS FI L E D APPEAL BEFORE THE LD. CIT(A) . DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A) , THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAS SUGGESTED INCOME OF THE ASSESSE BE ESTIMATED AT 5% OF THE TOTAL RECEIPT OF RS. 2.5 LACS AND THE ASSESSING OFFICER WAS N OT JUSTIFIED IN ESTIMATING THE INCOME AT RS. 2.5 LACS WITHOUT ANY MATERIAL. THE LD. CIT(A) HAS REJECTED THE CONTENTION O F THE ASSESSEE AND HELD THAT IT IS UNDISPUTED FACT THAT IT IS EVIDENT FROM THE ADMISSION OF THE MATERIAL ON RECORD THAT ASSESSEE HAS IMPORTED 1245. 64 MT ( IG) DURING THE PERIOD FROM MARCY, 2004 TO AUGUST, 2004 FOR SOM E OTHER BUSINESS HOUSES FOR WHICH HE HAS RECEIVED AN AMOUNT OF RS. 2.50 LACS FOR EACH BILL OF LADING FOR JUST LENDING HIS LICENSE. THIS UNDISPUTED FACT COULD NOT BE DISPROVED BY THE ASSE SSEE BEFORE THE LD. CIT(A) , THE REFO RE, THE APPEAL OF T H E ASSESSEE WAS DISMISSED . 4. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, IT IS NOTICED THAT THE INSTANT APPEAL WAS FILED BY THE ASSESS EE IN 2013 AN D THE CASE WAS ADJOURNED FOR 15 TIMES , MOS T OF THE TIMES , THE ADJOURNMENT WAS TAKEN BY THE COUNSEL OF THE AS S ESSEE. CONSIDERING THE FACTS THAT IT WAS QUITE OLD CASE , THE ADJOURNMENT APPLICATION OF THE ASESSEE WAS NOT FOUND TO BE APPROPRIATE AFTER CONSIDERING THE OLD APPEAL AND ISSUE INVOLVED IN T HIS CASE, THEREFORE, REQUEST FOR ADJOURNMENT WAS REJECTED. 5 . WE HAVE LD. DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL ON RECOR D CAREFULLY. IT IS NOTICED FROM THE STATEMENT OF THE ASSESSEE GIVEN BEFORE THE DIRECTORATE OF R EVENUE AND THE M ATERNAL REFERRED BY THE ASSESSING OFFICER MENTIONED IN DETAIL AT PAGE 4 TO 6 OF THE ASSESSMENT ORDER AND SUBMISSION OF THE I.T.A NO S . 7 2 & 73 /RJT /20 13 A.Y. 2004 - 05 & 2005 - 06 PAGE NO SURESHBHAI MAKANSHI GADESHA VS. ITO 4 ASSESSEE MADE BEFORE THE LD. CIT(A) THAT I T IS CLEARLY UNDISPUTED FACT THAT ASSESSEE HAS RECEIVED AN AMOUNT OF RS. 2.50 LACS FOR WHICH B ILL OF LADING FOR JUST LENDING HIS LICENSE . IN SPITE OF GIVING OPPORTUNITIES BY THE ASSESSING OFFICER AND THE LD. CIT(A) DURING THE COURSE OF ASSESSMENT AND APPELLATE PROCEEDINGS, THE ASSESSEE HAS FAILED TO DISPROVE THE MATERIAL FACT THAT ASSESSEE HAS NOT DISCLOSED THE AFORESAID AMOUNT EARNED FROM LENDING HIS LICENSE TO SOME OTHER BUSINESS HOUSES . DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE HAS NOT GIVEN ANY EVIDENCE THAT HE H AS INCURRED ANY EXPENDITURE FOR EARNING SUCH INCOME. UNDER SUCH CI RCUMSTANCES, WE OBSERVED THAT IT IS NOT POSSIBLE TO EARN SUCH INCOME WITHOUT INCURRING ANY EXPENDITURE , THEREFORE , WE CONSIDER THAT IT APPROPRIATIVE TO ALLOW 20% OF SUCH INCOME WHICH COMES TO RS. 50 ,000/ - AS EXPENDITURE INCURRED FOR EARNING THE AFORESA ID INCOME. ACCORDINGLY, AN AMOUNT OF RS. 2 LACS ( RS. 2, 5 0,000/ - - RS. 50,000/ - ) IS SUSTAINED AS INCOME EARNED F R O M LENDING LICENSE. SIMILARLY ON IDENTICAL FACT AND IS SUE FOR ASSESSMENT YEAR 2005 - 06 , 20% OF 10 LACS WHICH COMES TO RS. 2 LACS IS ALLOWE D AS EXPENDITURE FOR EARNING THE INCOME IN ASSESSMENT YEAR 2005 - 06. THEREFORE, AN AMOUNT OF RS. 8 (10 LACS - 2 LACS) IS SUSTAINED AS INCOME EARNED FROM LENDING HIS LICENSE TO SOME OTHER PARTIES. THEREFORE, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 6 . IN THE COMBINED RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OUR T ON 13 - 0 9 - 201 9 SD/ - SD/ - (RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 1 3 /0 9 /201 9 / COPY OF ORDER FORWARDED TO: - I.T.A NO S . 7 2 & 73 /RJT /20 13 A.Y. 2004 - 05 & 2005 - 06 PAGE NO SURESHBHAI MAKANSHI GADESHA VS. ITO 5 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, RAJKOT